Beijing's Move to Tighten Credit
Sinks Chinese Financial Markets

By

James T. Areddy Dow Jones Newswires

Updated Aug. 25, 2003 11:09 p.m. ET

SHANGHAI -- China's first credit tightening since the mid-1990s chilled financial markets, which interpreted the measure as a sign that regulators are finally shifting from a pro-growth strategy to focus on cooling the economy.

On the face of it, the weekend announcement by the People's Bank of China, or central bank, was a fairly modest one: Effective Sept. 21, it will increase the reserves that banks are required to set aside with the central bank by one percentage point to 7% of deposits. But the announcement packed a...